Cancellation Of GST Registration
By Registered Person: 29(1)
BY LEGAL HEIRS: 29(1)
DEATH OF PROPRIETOR | Discontinuation | Amalgamation | Demerger |
Death | Otherwise Disposal | Change in Constitution | |
Transfer of business | Not Liable u/s 22/24 | Opt-out from Voluntary Registration |
SUO-MOTTO BY PROPER OFFICER: 29(2)
♦ Normal: For continuous 6 Months
♦ QRMP: For continuous 2 Tax Periods
Liability of RP not affected due to cancellation: 29(3)
Liability of RP shall not get affected due to cancellation even if these are determined after effective date of Cancellation.
Payment on cancellation: 29(5)
Every RP whose registration is cancelled, shall pay an amount, by way of debit in E-Credit Ledger/ E-Cash Ledger
Transaction value as per section 15(1): a) Price actually paid/payable b) Supplier & recipient are unrelated c) Price is the sole consideration.
Rule 40(2): For Sec 18(6), ITC of CG shall be calculated @5%/Quarter or part thereof from the date of issue of invoice. [Benefit to RP]
Section 18(6): Where CG has been supplied by RP on which ITC has been taken, the RP shall pay
Rule 44: For ITC reversal on RM/WIP/FG or CG under section 18(4) or 29(5)
18(4):
29(5):
For RM/WIP/FG: Input tax credit to be reversed shall be calculated proportionately on the basis of the corresponding invoices on which credit had been availed(no need of utilisation as the amount in credit ledger will be reduced) by the registered taxable person on such inputs.
If Invoice is not available: Consider prevailing Market Rate as on the date of Opting in for Sec 10/Exemption date/Effective date of cancellation.
This calculation(market rate based) needs to be certified by CA/CMA.
For CG: ITC to be reversed shall be the ITC belonging to remaining useful life in months considering the total useful life of FIVE YEARS(60Months)
♦ Part of the month= 1month
Above calculations are to be done separately for CGST, IGST, SGST, UTGST.
Above reversals are to be shown in
44(6): For Section 18(6) also, above method of ITC calculation is to be used.
Provided that where ITC amount>Tax on T.V, then that ITC will become Output Tax Liability and the same shall be furnished in GSTR 1.
Both Rule 44(6) & 40(2) cover Section 18(6), However, Rule 40(2) is more beneficial to RP and thus the same can be preferred
RULE 21: CANCELLATION BY PROPER OFFICER ON CONTRAVENTION
M/S SHYAM SUNDAR SITA RAM TRADERS vs. STATE OF UP
Where action has been initiated u/s 74 against a RP, then the registration of such RP cannot be cancelled u/s 29(2) by P.O on the ground that said RP is non-existent and mere Bogus firm.
RULE 21A: SUSPENSION OF GST REGISTRATION
As per Section 29, When cancellation application is filed by RP or cancellation is initiated Suo-motto by proper officer, the proper officer is authorized to suspend registration during pendency of cancellation proceedings for such period and in such manner as prescribed in Rule 21A.
21A(1): Where RP has applied for cancellation under rule 20, the registration shall be deemed to be suspended from the date of submission of application or the date from which cancellation is sought, whichever is later, pending the completion of proceedings under rule 22.
21A(2): Where P.O has reasons to believe that the registration is liable to be cancelled under rule 21, he may suspend the registration from a date to be determined by him, pending the completion of proceedings under rule 22. [WITHOUT PROVIDING OOBH, however SCN for cancellation is required]
[suspension date decision to be taken by P.O and not by CCGST/CSGST]
21A(2A) Anomalies leading to cancellation of registration, detected on comparison of 3B with GSTR 1 or 3B with GSTR 2A/2B, registration shall be suspended and GST REG-31 shall be issued.
21A(3):
♦ This means, during suspension period also, supply can be made using Bill of supply and that too @MRP otherwise RP has to bear Tax cost himself.
♦ And Later on revocation of suspension, Revised Invoices needs to be issued u/s 31(3)(f) within 30 days from the date of revocation.
♦ Thus, where cancellation request is rejected: Returns for suspension period needs to be filed later on.
♦ This means, return filing option has to be provided in suspension period also where registration is suspended due to non-filing of returns.
♦ As of now, First Return u/s 40 is not applicable.
RULE 22- Cancellation of Registration
from the date of application by RP/legal heirs in GST REG-16 or the date of reply to SCN(GST REG-17) under Rule 22(1) or SCN under rule 21A(2A)
♦ Reply to SCN (REG 31) under Rule 21A(2A)- 30Days
♦ Reply to SCN (REG 17) under Rule 22(1)- 7Days
Drop Proceedings: GST REG-20
♦ Where reply to SCN REG31/REG17 is satisfactory
♦ Proceedings to be dropped even without reply where SCN REG-17 was issued u/r 22(1) due to Non-filing of returns as provided in section 29(2)(b)/(c), and all the returns have been filed along with payment of dues.
Section 30-Revocation of Cancellation of Registration:
30(1): RP can apply for revocation within 30 Days (within such period and in such manner and subject to such conditions & restrictions, as may be prescribed, by making amendment in Finance Bill, 2023 vide Clause 131A) from the date of service of cancellation order in GST REG-19 where cancellation has been initiated by P.O
Provided that, the above time limit can be extended by
♦ AC/JC by 30days
♦ Commissioner by further 30days
30(2): P.O can either accept/reject revocation application
♦ Order within prescribed time (Rule 23)
♦ OOBH before Rejection order
Rule 23 Prescribes
Rule 23- Revocation of Cancellation
Where Registration is cancelled prospectively:
Where Registration is cancelled retrospectively:
√ Revocation Acceptance order in GST REG-22 within 30Days from the date of receipt of application V’ Revocation Rejection order in GST REG-05
♦ Before issuing REG-05, P.O shall issue SCN in REG-23 (why revocation application not to be rejected)
♦ Reply by RP in REG-24 within 7 Working days from the date of service of REG-23
♦ P.O shall act on the Reply in REG-24 within 30Days from the date of reply
Revocation Application cannot be filed without Aadhar Authentication.